Dabur estimates first quarter sales rose over 10% as inflation eases

Dabur India Ltd said on Thursday it estimated that first-quarter sales increased more than 10%, as easing inflation allowed customers to spend more on the consumer goods company's products.

Demand trends in both urban and rural India improved during the quarter, Dabur said.

The country's annual retail inflation cooled to a more than two-year low of 4.25% in May as cost pressures on food eased.

Cooling inflation is expected to lead to year-on-year expansion in gross margin in the quarter ended June 30, according to the company, which makes Dabur Red toothpaste and Real Activ packaged juice.

Dabur also expects the improvement in gross margin to continue for the full year.

The company said its international business is expected to report double-digit growth in the first quarter, while India business to post high single-digit growth.

The healthcare and home & personal care businesses in India are projected to grow in double digits, backed by mid-single digit volume growth. Unseasonal rains and a moderate summer, however, led to a muted quarter for the company's food and beverages segment, it added.

Dabur expects profit after tax growth to be lower than operating profit growth due to expenses related to its acquisition of spices and seasoning maker Badshah Masala.

(Reporting by Ashish Chandra in Bengaluru; Editing by Savio D'Souza and Shilpi Majumdar)